Akamai Up On Idle Chatter

Akamai, a leading content distribution network, saw its stock jump almost 6 percent to about $23.97 a share today, leading to speculation by some blogs that the company might be takeover bait. Prompting this talk is the company’s market capitalization of around $4 billion.

The whole fracas today is nothing more than a tempest in a teapot, and I am not putting much credence to this talk. Why? First, the stock has already started to come down. Secondly, today’s trading volume isn’t too different from an average daily volume of Akamai stock trading.

More importantly, Akamai has come through a really rough patch and is starting to move in the upward direction. The company management is loathe to sell and more acquisitive in nature. If you follow the industry long enough, like I have, then you know that there is a rumor a week when it comes to Akamai and Limelight Networks. The whole thing feels like one big circle jerk.

Regardless, this chatter brings up the big question: Who will buy Akamai? In the past there were some serious talks between Akamai and AT&T, but they didn’t go anywhere. AT&T is launching its own CDN efforts, though it is hard to tell if it had any impact on Akamai’s business.

Given its interest, AT&T could come back to the table. Thinking beyond AT&T, other suitors for Akamai could include Level 3, Verizon, Comcast or some international telecom operators. Cisco, Microsoft and Google could throw their hats in the ring. Akamai has an enviable infrastructure and still remains a dominant player in the CDN business.


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